[05:35:00 PM] => Mr. Gul Teckchandani, CIO, Sun FC has joined us for the chat.

[05:35:54 PM] => Samdash: By when do you believe investors in emerging tech fund would alteast get zero return?

[05:36:58 PM] => Teckchandani: The current prices of Tech shares are down to about 5% of their peak prices in Feb. 2000. 5% normally would mean that the market is saying that the software business has defaulted. This is not correct. If you think that the software industry is going to go bust then you might as well write the obituary of this country. In terms of when are we going to get to par value given our NAV logically this should take about 24 months assuming the Industry growth rate of 30-40%. But if you think that you can predict prices absolutely to the 'T' that would be over confidence.

[05:37:29 PM] => Parag Parikh: In the value fund, you have halved your exposure to Infosys. What is the reason?

[05:38:01 PM] => Infosys was an over owned stock and we expected the prices to correct because of the sentiment prevailing for the tech sector. However now since the price has come off we may go back to our original weight.

[05:43:15 PM] => Vidya: Why have you not disclosed the portfolio of resurgent India fund?

[05:43:48 PM] => GT: That goes out only to our customers since this is not a routine fund, the entry level being a minimum of Rs. 1 Lac. Its a 'patience Fund’ and not for comparing with the Index on an ongoing basis.

[05:44:17 PM] => Kamlesh: How do you justify your investments in BSES, GAIL, and GTB in your emerging technology fund?

[05:44:50 PM] => GT: BSES is already into telecom and ISP. GAIL is setting up the fibre optic network and GTB is the only Pvt. Sector bank available at the current cheap valuations and will be using the Internet and e-commerce like ICICI and HDFC bank.

[05:45:54 PM] => bindurao: Every FM in the country was saying that the markets will continue to boom. & then the crash happened! Millions of investors have lost money with funds languishing below par value today. Now when a FM says the markets will rise, why should an investor believe him?

[05:46:57 PM] => GT: Fund Managers or Finance Ministers are unlikely to be able to predict the prices of stocks. What is possible is to understand businesses and their potential on a longer-term basis. However, there is no gain saying that when prices come down everybody fears the worst. Not very many people are talking of fundamentals today. If you think independently nothing has dramatically changed versus Feb 2000- EXCEPT prices. Tops and bottoms of the market are not known but are a matter of probability. This is the time to invest since the risk is lower. Obviously the FM has not given you the time frame but when the Index has come down from 6150 to 3500 the risk is only half and if the slide was to continue at the same pace you shall get all Indian Stocks free in the next two months. That to my mind again is not going to happen.

[05:47:31 PM] => Vijay Kannan : Your balanced fund is very volatile in it’s returns. Why is it so?

[05:48:06 PM] => GT: Balanced Fund has a tech weightage of 15-16% - added to that there is about 59% equity exposure. With equity being volatile over the last twelve months and only moving southwards has resulted in the balanced fund going down.

[05:51:49 PM] => Priyanka: Do you get hate mail from investors whose NAVs have crashed?

[05:52:44 PM] => GT: Does the question really CRY for an answer? Obviously nobody likes loosing money and our jobs are like the secretary of a co-operative society- thankless. When the markets are going up investors want maximum return and when the markets are falling no loss!!! But I look at it philosophically and try and understand the anguish and do whatever necessary to handhold the investor.

[05:53:23 PM] => Vinju: Do you think `Alstom Power` can become another `Tata Power` soon?

[05:53:49 PM] => GT: Two different businesses. Alstom Power makes Equipment whereas TATA Power is actually a transmission and generation Company of the end product - electricity.

[05:54:27 PM] => Vivek: Where do you see the tech sector headed for this year

[05:55:55 PM] => GT: End of this year positive returns shall come from the tech sector and the prices are lucrative today.

[05:56:26 PM] => Kiran: What do you think would be the impact of the ban on badla?

[05:56:59 PM] => GT: Liquidity will be impacted and the transition should be seamless and no time gap between the banning of badla and the introduction of options.

[05:58:00 PM] => Varghese : Can you suggest some scrips good for long term gains? In comparison Global Telesys is better than HFCL?

[05:58:32 PM] => GT: No Comments due to compliance issues.

[05:59:02 PM] => Rakesh: How are futures and options a better alternative to badla?

[05:59:38 PM] => GT: In a developed futures and options market the cash market moves on the basis of the futures and option market. Further with Options u can manage and hedge your risk

[06:06:27 PM] => Harry: Swimming Against the Tide - A Zero Sum Game? Please comment.

[06:06:46 PM] => GT: You gotta be a good swimmer but however in the equity markets please remember you are always alone . Just be independent. There is no point in trying to predict prices – predict the business fundamentals.

[06:07:25 PM] => Varghese: I bought 500 shares of Nalco on expectation of company will show highest ever net this quarter. But company’s result disappointed me. Shall I hold these shares?

[06:07:38 PM] => GT: No Comments due to compliance issues.

[06:09:05 PM] => Ketan Parekh: I want to invest in mutual funds to get rid of Tax. I also would like to invest in schemes which gives me good return? Can you suggest any specific scheme?

[06:09:19 PM] => GT: Go for diversified schemes of any Fund House.

[06:10:02 PM] => Harish Kadam : Dear Mr. Gul you have been an old hand in the market place . In your opinion should fund manager/fund houses charge management fees only if they perform i.e. relative to benchmark indices. What I’m asking is that only if you beat or are equal to the sensex on a bull market or have fallen less than any indice in a bear market should a fund house be paid its fees - your comments

[06:10:15 PM] => GT: No Comments

[06:10:44 PM] => Prashant: Would you ask an investor to average out his holdings? Do you actually believe in averaging out or is it just a mathematical phenomenon?

[06:11:12 PM] => GT: If you understand the fundamentals and are patient with your investments please average since that is an opportunity. Look at it this way that what you liked at higher prices why shouldn’t you when it is cheaper.

[06:11:44 PM] => Rajesh: Forget a zero sum game. All equity funds have played negative sum games with the investor. Do you see the investors ever recovering their money if they invested last year. If yes given what time frame?

[06:12:09 PM] => GT: Answered above- 24 months for returns

[06:12:34 PM] => Gary Rakesh: what do you say about Satyam?

[06:12:46 PM] => GT: No Comments due to compliance issues.

[06:13:07 PM] => RKSingh: Why is it that the statement of Azim Premji that Wipro is going to be $5bn company by 2003-04 failed to enthuse the market.

[06:13:31 PM] => GT: No Comments due to compliance issues. I also read the same comments and I hope that he sticks to what he says.

[06:17:48 PM] => Janki: All Fund houses launched Sector and other types of Equity funds last year when the markets were good. Now that the tech bubble has burst and huge losses the same fund houses are promoting debt. Aren't you as fund managers responsible in a way for the euphoria created last year? Secondly It’s very nice to hear statements like revenue models, management vision etc. Where was all that when these funds or money moved to such asset class. Is it always the case of shutting the gates after the horse has bolted - Are not you as fund houses expected to be more aware and more mature?

[06:19:00 PM] => GT: It is difficult for a fund manager to time the markets. Prices do keep fluctuating but the underlying businesses if strong then the stock prices do come back. There is pain when the prices come down. This irritation obviously results in questioning the markets and fund houses. Having said that, equities over longer terms as documented by RBI has given the best return as compared to any other asset class. It is not that we are not pained by the volatility and down draft in the markets but 2001 worldwide has not treated investors well particularly equity investors. I can only say that we have not invested in only dot com in the Indian domain because in my limited manner I was in lighter vein telling dot com companies that in India there is a problem of Commerce` itself why talk of e-commerce.

[06:19:17 PM] => Balshekar: What in your opinion would you take to be the cost of investing?

[06:19:46 PM] => GT: I do not understand the question. In equity plain comparisons with alternate bank deposit returns will satisfy you at points in time. Let us assume that if not invested in Equity in 99-2000 you would have been pained for not having invested in equity. But now Equity has become a dirty word.

[06:20:22 PM] => Rashesh : Your view on rolling settlements-- don`t you think that the individual investor/speculator has lost his level playing field with that of the FII / MF if Future and Options make its way in the markets over the next two months?

[06:20:46 PM] => GT: These are but technical situations, which should be lookedat as opportunity and if the transition is seamless the above (already answered) holds.

[06:21:05 PM] => Srini: Many funds had invested in dotcoms at high valuations. In their recent portfolios most of them have halved the value. Do you believe it is right for fund managers to invest in unlisted stocks? How do you value unlisted securities?

[06:21:38 PM] => GT: Pre-IPO case, unlisted is alright. But dot coms, one will have to see whether it is profitable because as investors we should only buy profits.

[06:27:36 PM] => Avinash: Your views on our economy? How and where do you see a 6% growth?

[06:28:01 PM] => GT: In basic core industries and in software. In relation to GDP, CMIE numbers corroborate a 6% growth rate but in the Indian context do not try and do a top down approach on the Stock Markets. Look at the Companies individually and this is because the overall data points are not reliable.

[06:28:16 PM] => Anandk: If I wish to invest in mutual funds, what kind of schemes to do suggest I invest in?

[06:28:27 PM] => GT: Answered above

[06:29:24 PM] => Harish: Earlier the stocks were overvalued (tech stocks). Yet all fund houses had them in their portfolio and never exited out of such stocks, now they are undervalued but all portfolios have crossed their threshold limits of 10% on stocks such as Infosys, Satyam, Wipro, Digital etc- given the scenario would it not have been prudent to sit on cash rather than stick your INVESTORS NECK OUT?

[06:29:42 PM] => GT: Hindsight vision is always 20-20 because if you knew that the top was 6000 then you are near to GOD. Most of us will be unable to predict the tops and bottoms and P/E ratios are the only ones that keep changing not businesses. Therefore it is better to not chase momentum and if the price has come down WAIT unless you are convinced that the business also is worsening.

[06:30:36 PM] => Jajoo: Is better fund management a privy to the so called `club class`. The Sun resurgent India Fund has lost a mere 5% compared to a 30% fall in the Sensex. (From the date your scheme quoted its NAV). Compare that to 30% plus falls in your Balanced, Tech and value funds. - What should the small investor says to you - `Hamara Khoon Pani hai or club class ka khoon khoon hai`- Kindly elaborate on this preferential treatment.

[06:31:33 PM] => GT: I wish I had the privilege that I know more than somebodyelse. Let me only say that after 21 years in the market, the day you feel that you are privileged, that will be the day you are ready to go home. You have seen several big guns being humbled by the markets and also the market do not distinguish in its treatment to a fund manager than to an investor.

[06:32:17 PM] => Vishalk: Let me congratulate you on the good performance of your income scheme during the turbulent times of June 2000 - September 2000 when you hardly got affected vis-a-vis other schemes where I had put my money. But at the end of the year I got a net return of 10% only from you when compared to a 12-13% returns elsewhere. - Did you miss the boat while swimming against the tide?

[06:32:45 PM] => GT: No we in our debt schemes try and protect capital. Safety, liquidity and then return. In that order is our philosophy. In my opinion and factually we gave last year 1.2% lower returns when compared to a few funds. However that was in the interest of being conservative to protect capital and not take aggressive risks to give you that extra 1-%.

[06:38:04 PM] => Deepak: I have invested in your SUN MIP fund but over the last year I just got a mere 7% return. Would not have I got a better return by investing in an absolute liquid fund. Were you sitting on cash?

[06:38:37 PM] => GT: No. We were in Equity to the extent of 5% that resulted in a little lower return. However we are today into DEBT only.

[06:38:58 PM] => Haresh: Is the repurchase price of UTI US 64 its true value. If Yes would you recommend it as the best investment in this falling market.

[06:39:18 PM] => GT: No Comments.

[06:39:44 PM] => Krishanan: Recently the Finance Minister had indicated that the Rupee is overvalued vis a vis its counterparts in the Asian region. What is your take on the exchange rate for the next one-year?

[06:39:56 PM] => GT: A 5-8% depreciation annually.

[06:40:14 PM] => Nathan: Is it worth holding Cyberspace Infosys and how is the Company’s status now?

[06:40:26 PM] => GT: No Comments

[06:40:48 PM] => Navin Batra: I am a professional and like straightforward answers , do we see some value buying in Software stocks in next 3-6 Months ?

[06:41:19 PM] => GT: Absolutely - the whole market is cheap and you are getting New Economy stocks at less than old economy prices.

[06:41:39 PM] => Aro: Is this the right time for a dot com to enter share market?

[06:41:54 PM] => GT: No public issues will be absorbed in this market.

[06:43:27 PM] => B Sridhar: what is going to happen when market is behaving so volatile? What happened to the investor of growth funds, whether the investor in the growth funds can switch their investments to income schemes, then wait until the market has to pick up, then do vice versa. What happen when all over the world there is lot of software people are coming out, whether the impact will be for Indian companies and the IT companies having any potential for future growth.

[06:43:54 PM] => GT: Old saying by low sell high. But routinely most people buy high and sell low because euphoria’s result in creating missed out feeling which sucks in even the disciplined. But these are the very same questions asked in every meltdown.

[06:45:22 PM] => Ayush: Do you think that Fund Managers should be more accountable and some legal action should be taken against them if they goof up? As in all professions e.g. doctor and lawyers, if they make a mistake then there is a possibility of some legal action. Do you think fund managers should be accountable to the public and should only be paid if they have some positive returns?

[06:46:01 PM] => GT: Fund managers invest in businesses and as long as the business is growing/doing well in which investments have been made there is no guarantee on stock prices because prices on a short-term basis are also a result of technical factors and also sentiment. I do not think that legal action can get us the prices or the Markets roaring. In every equity market worldwide fluctuations always happen and effectively what you are saying that the market should head northwards in perpetuity to avoid legal hassles.

[06:46:16 PM] => Chetan: With all your experience how come your fund performance is so poor?

[06:46:36 PM] => GT: A function of the markets and relative terms the schemes have performed better than their benchmark indices.

[06:49:01 PM] => Deva: In the short term in the Tech Sector, which is the best Strategy- Technicals or Fundamentals?

[06:49:28 PM] => GT: Whatever makes money for you is the best strategy.

[06:56:15 PM] => Deepak: I have invested in your SUN MIP fund but over the last year I just got a mere 7% return. Would not have I got a better return by investing in an absolute liquid fund. Were you sitting on cash ?

[06:56:57 PM] => GT :No we were in Equity to the extent of 5%, which resulted in a little lower return. However we are today into DEBT only.

[06:57:17 PM] => Haresh: Is the repurchase price of UTI US 64 its true value. If Yes would you recommend it as the best investment in this falling market

[06:57:37 PM] => GT:NO Comments

[06:58:09 PM] => Krishanan: Recently the Finance Minister had indicated that the Rupee is overvalued vis a vis its counterparts in the Asian region. What is your take on the exchange rate for the next one-year?

[06:58:42 PM] => GT:A 5-8% depreciation annually.

[06:59:22 PM] => Nathan : Is it worth holding Cyberspace Infosys and how is the company's status now?

[06:59:41 PM] => GT: No Comments

[06:59:58 PM] => Navin Batra: I am professional and like straightforward answers , do we see some value buying in Software stocks in next 3-6 Months ?

[07:00:20 PM] => GT: Absolutely – the whole market is cheap and you are getting New Economy stocks at less than old economy prices.

[07:01:40 PM] => Aradhana: What is the future of liquid funds in the short run.

[07:02:04 PM] => GT:The same as the business in the past.

[07:02:29 PM] => Julie: Firstly could you kindly define the meaning of a Stock Future and a Stock option (I happen to have an idea but yet). Secondly given that our Institutions have worked in less informative /transparent markets when compared to the FII's

[07:02:56 PM] => GT:Option is insurance and the Future is like buying but no physical settlement is done and only cash is transacted. Indian Brokers have been aware of options / future since ages. The nomenclature used in India informally was ‘Phatak’. The FII’s necessarily understand it better compared to the retail investor and hence it will help them in mathematically arriving at option prices quickly. This is a detailed subject and you are welcome to drop us a line or come in person to discuss the same.

[07:03:54 PM] => Srini: I have invested 50000 in Sun F&C emerging fun @ of Rs 10 and today it lingers at about Rs 3. what are you going to do about it? I hope you can redress my situation in some way.

[07:04:24 PM] => GT: The businesses in the tech sector in which we have invested are continuing to grow. We expect that not only will there be returns, but over a period of time one can expect good returns. However, the current meltdown worldwide in the tech space has mauled all the equity investors. So I feel if you have averaged or atleast just stop looking at the price for sometime, returns will happen.

[07:05:11 PM] => Dev: Why do you have `No Comments for most of the questions?

[07:05:26 PM] => GT: Compliance issues. I am not allowed to comment on individual companies.

[07:05:43 PM] => jm: What are your views about BioTech Co and which according to you are worth focusing on.

[07:05:56 PM] => GT: Not enough listed companies.

[07:06:12 PM] => Bhatia: where do you see the media entertainment companies headed to?

[07:06:36 PM] => GT: If you can understand the internal controls of these companies, the business potential is good.

[07:07:34 PM] => Bhatia: What is your outlook on the markets for the next 6 months?

[07:07:54 PM] => GT: Positive.

[07:09:54 PM] => GT: Thank you for participating in this chat. I am sorry that I was unable to answer all the questions. However, you can get in touch with me for any clarifications.

[07:11:36 PM] => myiris.com: Thank you all for your participation in the chat at myiris.com. Dont forget to send in your questions to Mr. John Band, CEO, Ask Raymond James for the chat on Friday, 4th may 2001 at 4:30 am.

[07:15:33 PM] => myiris.com: Please log on to myiris every Monday for a Fund Manager chat and every Friday for an expert chat.

Disclaimer

The views expressed by Mr. Gul Teckchandani in this programme are that of his own and not necessarily that of Sun F & C AMC (India) Pvt. Ltd., Sun F & C Mutual Fund or that of Foreign & Colonial Emerging Markets Ltd. U.K.

All investments in mutual funds and securities are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities Market.

The views thus expressed by Mr. Gul Teckchandani in this programme are in no way that of IRIS Ltd. IRIS shall not be held responsible in any manner for any action / inaction on the part of the participant / viewer of this chat programme..